French police are struggling to contain a gang war in north-eastern Paris that has left one dead and several injured, as locals complain that they are being fenced into high-rise ghettoes to make way for the middle-class.

The 19th arrondissement in northern Paris was supposed to be celebrating its renaissance this autumn with the old state funeral parlour transformed into a major new arts quarter opening next month.

But north of the canal, a war between rival gangs on high-rise estates has escalated, with riot police moving in to control it. For 15 years, local rivalries between the Curial and Riquet estates have seen vicious knife-fights and score-settling, but now more youths are turning to "le gun".

Last week a 23-year-old postman was shot dead in the street. Days afterwards, a man from a rival estate survived a shooting but was left with serious leg injuries. Yesterday, two teenagers were being treated in hospital after an attack in which one of them had his stomach slashed open with a knife, only metres from the site of the fatal shooting.

"There are two 19th arrondissements, the rich and us, and we're being shut away in high-rises and forgotten," said the mother of one teenager.

Local youths have been reduced to the slang labels: "black", "beur" (north African) or "feuj", the back-to-front slang for "juif" or Jew. Last summer, a local Jewish teenager was left in a coma after an attack that caused President Nicolas Sarkozy to make a statement warning against antisemitism. But social workers believe the real divide is not over race or religion but geography, with streets tagged as frontiers or no-go zones and youths targeted according to the estate where they live.

A town hall official who researched the cause of the "war" between the rival high-rises said he was at a loss to determine the origin of the feud - whether it was a football match gone wrong or a robbery. He likened it to an age-old family feud in Brittany - no one could remember why they were fighting any more.

"I don't even want to bring my three-year-old son to see my mother in case he gets shot," said Khedidja, 27. Her brother, Moussa, 23, was shot in the leg last week as he left his apartment block to see friends after breaking the Ramadan fast. "People don't want to go out anymore. It's as if the estate you come from is stamped on your forehead and the others see you as the enemy. I refuse to be scared, that would mean they've won."

She said neither her brother, from Cural estate, nor the murder victim, from Riquet estate, were gang leaders - they had simply been caught in the crossfire.

"This is nowhere near over," said one social worker, arguing for better education facilities and youth groups.

While the parks and canals of the 19th arrondissement are being gentrified, the northern neighbourhoods have a high level of social housing and the highest concentration of young people in Paris. Unemployment at 17.7% is more than double the city's average.

Hadrien Lenoir, of the group SOS Racisme, said: "During the 2005 riots in the suburbs, violence happened on forgotten, isolated estates with no transport or infrastructure. But this is happening right near a metro station and all sorts of public services. The reason is that people have been ghettoised. Rich middle classes are moving into the south of the arrondissement pushing up prices, and everyone else is crammed into one area of high-rises with no social mixing or prospects."

Mouada Abdelali, an artist who worked on youth projects, said that he had seen local French youths repeatedly stigmatised for their skin colour or immigrant descent. "One teenager said to me: "I hate everyone even myself". How do you deal with that?"